Bassett Furniture Industries, Incorporated

Bassett reported third-quarter fiscal 2026 consolidated revenue of $82.8 million, up $2.7 million or 3.4% year over year. Gross margin was 57.5%, up 130 basis points, while SG&A excluding new store pre-opening costs was 53.9% of sales, down 150 basis points. Operating income was $2.8 million, versus $593,000 a year ago, and diluted EPS was $0.24 versus $0.09 last year. Retail net sales were $54.2 million, up 4.5%, with retail gross margin at 51.5% (down 90 basis points); wholesale net sales were $53.7 million, up 5.7%, with wholesale gross margin up 150 basis points. The company recorded $1 million of the $2.8 million tariff refund in gross profit this quarter, with more to be recognized mainly in Q4. Cash and short-term investments were $53.4 million, operating cash flow was $6.1 million, capex was $4.3 million, and full-year 2026 capex is now expected to be $9 million to $11 million, down from a prior $10 million to $12 million range.

CEO Robert Spilman framed the quarter as evidence that pricing actions, better execution, and new merchandising are starting to work. He highlighted stronger written sales, improved website performance, the new High Point showroom, the Heather Chadduck collection, and continued store-network expansion as key strategic pillars. His tone was upbeat but measured: he repeatedly said the consumer remains cautious, housing is still slow, and the environment is not easy, even though Bassett feels it is managing through the headwinds.

CFO John Daniel emphasized that profitability improved on both the P&L and cash flow side. He cited the $2.8 million tariff refund, $57.5% gross margin, 53.9% SG&A excluding pre-opening costs, $6.1 million of operating cash flow, and $53.4 million of cash and short-term investments. He also noted $4.3 million of capex tied to Orlando and the High Point showroom, and said Q4 capex should be $2 million to $4 million. On capital allocation, he said the company paid $1.7 million in dividends and $126,000 in buybacks in the quarter, and that Q4 is usually Bassett’s strongest cash generation period.

Analysts pressed on the mix of pricing versus volume, regional demand, store openings, Black Friday promotions, margin outlook, inventory reduction, and dividend policy. Management said wholesale units were down slightly while prices were up in the less-than-double-digit range, retail was similar, and all regions were up during the Labor Day promotion. They said only 2 store projects are planned for FY27, one a repositioning, and that Black Friday should not materially hurt margins; they also said September retail written margins are looking better, inventory should not fall as dramatically next quarter, and the dividend remains important and is reviewed each quarter.